Unemployment rate falls to 4.2% in July

Hours worked rose 0.3% in July. It had fallen 0.9% in June.

Underemployment fell by 0.1 points to 5.9%, reversing the increase in the preceding month.

The trend unemployment rate remained steady at 4.2%.

The context: On Tuesday, a statement accompanying the RBA monetary policy board’s unanimous decision to cut the cash rate target by 25 basis points to 3.6% flagged that “various indicators suggest that labour market conditions remain a little tight, although have eased further in recent months”.

The statement also noted that business surveys and liaison suggests that “availability of labour is still a constraint for a range of employers”.

In response to questions from journalists, RBA governor Michele Bullock said “at the moment it’s fairly uncertain where we are” in terms of full employment.

“I think there’s a balance here and a labour market that’s sort of in balance, maybe a bit on the tight side, maybe a little bit on the loose side, but broadly in balance I think is very consistent with what we’re aiming at,” Bullock said.

What they said: “Trend annual employment growth has been faster than population growth for most of the past year, but has slowed in recent months to be in line with annual population growth in July,” ABS head of labour statistics Sean Crick said.

“In trend terms, the participation rate rose marginally to 67.1 per cent in July, while the employment-to-population ratio stayed at 64.2 per cent,” Mr Crick said.

Treasurer Jim Chalmers said in a statement that the growth in jobs "is very welcome news".

"It means in just one week we’ve had another interest rate cut, the strongest real wages growth in five years, and now lower unemployment too," Chalmers said.